FCA Case Against UnitedHealth Signals DOJ’s Continued Focus on MA Insurers and Coding Practices

On February 16, 2017, the Department of Justice (“DOJ”) intervened in a False Claims Act (“FCA”) lawsuit against UnitedHealth Group, Inc. (“UnitedHealth” or “the defendant”), which alleges, among other things, that UnitedHealth “engaged in a widespread scheme to knowingly submit, or cause to be submitted, false claims for payment to the United States by submitting false ‘risk adjustment’ information to the Centers for Medicare & Medicaid Services (‘CMS’) in order to improperly increase the amounts CMS pays them or their clients.” United States ex rel. Poehling v. UnitedHealth Grp., C.D. Cal., No. 11-cv-0258-A, unsealed 2/16/17.

The case was filed in 2011 by a relator, Benjamin Poehling, who worked as a director in the finance department of a UnitedHealth subsidiary, United Healthcare Medicare & Retirement (“UHMR”), and was responsible for coordinating with another UnitedHealth subsidiary to provide risk adjustment services.  Under the risk adjustment model, plans receive risk adjustment payments (i.e., higher future, per-beneficiary payment rates) from CMS for Medicare Advantage enrollees whom the plans represent have been treated for more severe diagnoses in the current year based on the expectation that the enrollees also will require that level of heightened care in the following year.  Poehling alleges, in general terms, that UnitedHealth increased such risk adjustment payments by submitting “upcoded” risk adjustment claims to CMS, including claims “that a patient had been treated in the relevant time period for: (a) a diagnosis that the patient did not have; (b) a more severe diagnosis than the one the patient had; and/or (c) a diagnosis that the patient may have previously been treated for, but which was not treated in the relevant year.”

This FCA action against UnitedHealth is the most recent in a number of lawsuits involving Medicare Advantage insurers, including another ongoing case against UnitedHealth (United States ex rel. Swoben v. Scan Health Plan, C.D. Cal., No. 09-cv-5013, filed 7/13/09) and a pending case against Humana (United States ex rel. Graves v. Plaza Med. Ctrs. Corp., S.D. Fla., No. 10–cv-23382, filed 9/17/10).  The DOJ’s intervention in this action against UnitedHealth signals that the government is closely scrutinizing Medicare Advantage insurers, such that insurers should consider evaluating both their own risk adjustment practices, as well as the practices of any vendors that have been contracted to perform these services.